Guess what happened 25 years ago today?
On April 23, 1985 Coke released “New Coke”– the Sanjaya of colas. That proved to be misguided. So, how did it happen?
Dominant since World War II, Coke slowly conceded market share to archrival Pepsi (cue boos and hisses). The perfect storm of a new CEO–Roberto “No sacred cows” Goizueta–at Coke, a brilliant leader at Pepsi and Michael Jackson culminated in the mid-eighties.
Coke’s market research showed aging Baby Boomers preferred less sweet beverages and the youth market chose the hipper Pepsi Generation. Coke executives believed they needed a formula that was fresh and targeted to younger audiences. Taste tests confirmed Coke’s hunch.
Then Pepsi leader Roger Enrico hired global megastar Michael Jackson. As Enrico says in his book, “The Other Guy Blinked.”
In a rush to counter success driven by the Michael Jackson ads, Coke discounted a small, but very vocal subsection that expressed anger in market testing to changing Coke. By the way the MJ ads gained super dooper attention on news of the gloved one’s hair catching fire during filming. I digress…
Enrico wasted no time taunting the stodgy Coke brand. A companywide holiday was declared and a full page The New York Times ad celebrated Pepsi as the winner of the cola wars. Knowing Coke was preoccupied preparing for the big announcement, Pepsi PR went into high gear to cultivate skepticism among reporters, which caused the press conference to go badly. Marketing New Coke went downhill from there. And as they say, the rest is history.
The public reaction was so bad that the original formula was reintroduced just three months later.